Taking Control of the Smartphone Phenomenon
Insurance Networking News, December 1, 2009
It's probably no surprise to anyone that the activities framing the experiences in our personal lives have leaked into our business lives and vice versa. A September 2008 survey from The Pew Research Center's Internet & American Life Project reveals BlackBerry and personal digital assistant (PDA) owners are more than twice as likely to report that their employer expects them to stay tuned into e-mail outside of the office. In fact, 48% say they are required to read and respond to e-mail when they are away from work. Whether it's required by a company or it's a worker's choice, lines are being crossed, and that could pose many problems for companies, especially insurers.
The general use of smartphones within an insurance company seems to be by executives and other members of upper management. While some field employees and insurance agents may depend on smartphones for business communications, the availability of insurance-specific applications on these devices seems to be in the relatively early stages, according to Chad Hersh, a principal at New York-based Novarica. "There aren't that many smartphone applications out there right now for insurance," he says. "CSC (Falls Church, Va.) released an application [currently in beta] to enable agents and customers to access CSC systems on mobile browsers. Very few vendors have offered anything like that to date. It's really been up to the carrier."
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Other than a handful of quiet steps toward insurance-specific mobile apps and some mobile claims systems apps on smartphones, Hersh says, there's been little reason to have governance policies. Governance policies apply to other mobile devices, as the insurance industry has seen activity in mobile claims through PC tablets or Web-connected laptops, but little through smartphones. Hersh attributes this to "the classic insurance lag, where carriers wait to see if a standard emerges," he says.
Chad Hersh
However, many industry experts - Hersh included - agree that the insurance industry will see the mobile technology landscape start to change in the next couple years. Insurers are already providing mobile options to their customers. Earlier this year, Nationwide Mutual Insurance Co., Columbus, Ohio, released a mobile application that assists iPhone users after an auto accident. Additionally, Hersh says, USAA, a San Antonio-based provider of insurance and financial services to the military and their families, has completed some groundbreaking work on the banking side with iPhones and check depositing, and will likely shift some of that effort over to the insurance side. He believes this will lead to agents asking the question, "Why do my customers have more mobile access to the carrier than I do?"
PREPARE FOR THE SURGE
CIOs and IT departments need to be prepared for the predicted surge in smartphone usage among carrier employees, agents and consumers. They can begin by looking at how smartphones are currently used in their organizations and set policies that address security, application accessibility and overall control of corporate-sanctioned or personal smartphones. The only thing right now for which there are policies is e-mail on handhelds, Hersh says. Security and remote data wipes (erasing all data, making it unrecoverable) are going to have to become more of a focus in policies.
Darby O'Neill, CIO at Princeton Insurance, a medical professional liability insurer in Princeton, N.J., was curious about other insurers' smartphone usage when she attended a Physician Insurers Association of America event in early October. She questioned malpractice insurance CIOs at the IT roundtable about their smartphone policies and culture.
"I wanted to know because we, like everybody else, have information that I don't want in anyone else's hands," she says. "Out of 50 people (representing about 25 companies) in the room, only one company would reveal that it's letting people use their own phones to access their corporate e-mail." However, she heard the CIOs whisper to each other that they really didn't know if employees are using their personal phones for corporate communications.
THE RISKS INVOLVED
The unknowns related to smartphone usage is already a problem for CIOs, says Kevin Kalinich, national managing director of professional risk solutions for Aon Financial Services Group, Chicago. "A smartphone is designed to be flexible for new applications, and that's going to drive its usage." But the downside, he says, is that the smartphone may be too flexible. As a result, potentially harmful applications the smartphone manufacturer, operating system (OS) provider and network carrier didn't create can be downloaded onto the phone. "The apps introduce data exposures that weren't anticipated because they weren't embedded into the smartphone at the time the CIO decided to provide their workers with these devices."
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